By Steve LeVine<p>
Steve LeVine is a contributing editor at Foreign Policy, a Schwartz Fellow at the New America Foundation, and author of The Oil and the Glory.
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November 14, 2011

Is government-led investment in clean-energy technologies a boondoggle and destined to fail? In China, Japan and South Korea, the answer is no. But according to a few long pieces over the weekend, the answer is the opposite when it comes to the United States. The authors ask in essence whether the Obama Administration is out of its mind in joining the global race for the development and marketing of solar panels (pictured above, solar panels in China), wind turbines, advanced batteries and electric-enhanced vehicles.

In the Washington Post, Steven Mufson digs into history to lay out a sorry story of lame government forays into Big Energy: the Clinch River Breeder Reactor of the Reagan era; the Synthetics Fuel Corp. of Jimmy Carter’s administration; George W. Bush’s embrace of the hydrogen car; and the clean coal movement spanning several U.S. presidencies. The latest black eye is Solyndra, a California solar panel company that’s gone belly up after more than $500 million in federal loan guarantees.

The New York Times‘ Eric Lipton and Clifford Krauss weigh in with a deep dive into the Obama Administration’s other large loans for the solar panel industry, support that their sources say wasn’t clearly necessary, and made these businesses can’t-misses for their proprietors.

Finally, at the Boston Globe, Erin Ailworth casts doubt on the survivability of clean-energy technologies. She quotes David Victor, an ultra-smart analyst at the University of California at San Diego: "When you look at the big picture, it’s a big shakeout for the whole renewable energy industry. Many of these companies are selling products that are just not viable on their own without policy support, and some of that policy support is really expensive.”

These are important articles, pivoting on a profound question for national economies — how do you hit your target (the creation of jobs, greater wealth and geopolitical heft) at a challenging time of globalization and an apparent shift of great power?

Not surprisingly, there has been pushback. At Climate Progress, Joe Romm says this hand-wringing is off the mark. From 1978 to 2000, Romm writes, a handful of energy efficiency technologies received $400 million in federal loans that they parlayed into $30 billion of economic returns in the form of saved energy costs. Clean Technica’s Andrew Burger says the NYT piece is "slanted" — regarding a primary assertion that companies were effectively the recipients of largesse, Burger says most of the returns went to pay off the federal loans. On his blog, Michael Levi asserts that U.S. consumer spending on energy is so massive, that even if federal funding lowers market costs by 0.5 percent, it would be "generally pretty wise." Levi believes that federal subsidies have easily hit that mark.

Critics say the stupendous failures are evidence that an American government should simply not be in the energy investment game. Proponents of federal investment in highly risky technologies say that now is specifically the time when Washington must march onto the field, because no one else will.

I would be interested in one of the big VCs opening his books, and letting us examine the private balance of payoffs and fiascos. For his part, Vinod Khosla, the most prominent of the Silicon Valley clean-tech VCs, says diversity of investment is his own strategy for succeeding: "My willingness to fail gives me my ability to succeed."

That is the debate at its essence: Not should the U.S. government be in the business of investment, but should it be in the business of possibly failing?